The Future of Capitalism - Profits and Growth

[profgoose]

Growth is only possible when energy flow is increasing.

It is pretty simple really. When energy flow is increasing in each subsequent time period it is possible to increase the amount of work devoted to increasing the asset base of society. Alternatively, if the energy flow is decreasing...

Short of a miracle (let's pray for it!) energy flows are about to decline in a serious way. And as a result growth is an utterly fatuous notion. Unfortunately, the majority of the population, and especially the economists and politicians, don't get it. The economists still firmly believe that if energy costs (oil, coal, etc.) rise as a result of constraints on production then we will simply substitute other sources (wind, solar PV, etc.) and keep going as we have been for the last two hundred years. This is both stupid and foolish. It is a complete failure of intelligence and wisdom.

Over the next several decades we (humans) will have to change our understanding of what is feasible and what we need to be doing to have a future. The future does not include growth of the GDP or profits. Capitalism as it has been practiced in the 20th century and now hanging on in the early 21st century is dead. Or rather, at this juncture in history, it is moribund. It served its purpose to raise mankind's understanding of what is possible in this world. It was a necessary step in the evolution of knowledge but its time has come and gone.

http://www.theoildrum.com/node/6374

[FBaggins]

1. Mobus' straw man is simply wrong.

Growth is only possible when energy flow is increasing

Since this statement is flat wrong... and assuptions derived from it are without merit.

Short of a miracle (let's pray for it!) energy flows are about to decline in a serious way.

Presume not only that Peak Oil theory is correct (that it has already passed) but also that "peak justabouteverythingelse" miraculously coincides with it. This, too, is incorrect.

The future does not include growth of the GDP or profits. Capitalism as it has been practiced in the 20th century and now hanging on in the early 21st century is dead

Don't have a clue how he makes the leap to capitalism. Any OTHER economic system would ALSO be "dead" if we accept his underlying assumptions.

[Nederland]

2. Agreed

Amazing that he starts off with a statement like that out without feeling the need to prove it.

[Terry in Austin]

16. No counter-argument?

Flat dismissal?

You can have growth without increase? What that merits is an explanation!

[FBaggins]

22. That's the Burden of proof fallacy

The author's premise is based on two statements which he in no way supports. Pointing that out does not shift the burden of proof to me.

[bhikkhu]

24. kind of like saying "its flat wrong" without anything to back it

I don't know Mobus any better than I know you as far as the "authority" of either position, but his statement seems to me self evident. Your statement, I have no idea where it comes from.

[FBaggins]

28. If that were true, you wouldn't be able to post that, would you?

Becayse isn't it really the same thing?



I don't know Mobus any better than I know you as far as the "authority" of either position, but his statement seems to me self evident.

It may "seem" that way... but it simply isn't. Many a weak argument begins in that fashion (his, not yours). Concentrate the discussion on the conclusions while using slight of hand to distract from the fact that they are based on assumptions that you glassed over as accepted fact.

[skids]

26. Efficiency is the obvious counter-argument.

For example, if I am a computer programmer and I introduce new code that allows
users to do something new and useful with no additional equipment or energy
use (yes, this is more possible than even most computer coders care to realize)
then I have added to growth, using no more energy than I would have if instead
I had coded a pointless mess of well-marketed spaghetti code shimware (again,
more common than most computer programmers care to realize.)

Moreover, in a constant or decreasing energy environment, there is more incentive
to apply previously developed technology which was being ignored due to the
relative cheapness of energy and materials.

Healthy growth, unlike what we have, depends on these surge-and-collapse cycles
to ensure it goes back and gets rid of excesses from the surge. For example,
Had municipal utility bills not become significant during the last decade, we
would not be now enjoying the power and manpower savings of LED traffic signals.

The growth during the last century has been anything but healthy. We are already
in a consolidation phase, however (have been for a decade.) Long overdue, but
a healthy thing in the long run.

[joshcryer]

30. Efficiency is not infinite.

You look at life and biological processes require some minimum sum of energy to simply exist. If all humans on the planet had an equal share of energy utilization, adding just one more human makes overall energy use go up.

Unless by adding that extra human you are reducing the overall share of energy to everyone else.

That's not capitalism by any means.

[FBaggins]

31. Nor does it have to be.

"The supply of 'x' is finite... therefore we will run out of it next Thursday" is a common "peak 'x'" error that is frequently misapplied to other areas as well.

[skids]

34. Well, a few things...

1) The general trend in post-industrial civilization is for smaller
families. Rampant reproduction is a relic of the necessities
and mores of agrarian society, where big families made for
a comfortable "retirement." It slowly goes away as the old culture
inevitably dissipates. However, we still have a lot of agrarian
cultures, and they will continue to overpopulate unless they get
the infrastructure needed to move beyond those roots. In the meantime
it would be nice if the friggin abstinence prudes would just get out
of the damn way and let the family planning orgs do their jobs.

2) Efficiency is ONE example, one contribution towards a sustainable
society, not the only one.

3) I'm no big fan of capitalism. I think it can be positively applied
if it is contained within a field-of-play, but unbridled the results
are essentially a byzantine form of destructive anarchy.

4) We are closer to new energy technologies than you may realize, the
challenge is merely bridging the gap between what we need now
and what we will have later, and doing so with the least loss
of life and environment. Burning the remaining coal would be one
example of a bad bridge technology choice. Renewables are a good
bridge technology -- eventually they will run into footprint issues,
but they should get us through.

[h9socialist]

3. Capitalism . . . is going to die!

What music to my ears! Not a moment too soon either!

[kristopher]

4. Jared Diamond - Will Big Business Save the Earth?

"THERE is a widespread view, particularly among environmentalists and liberals, that big businesses are environmentally destructive, greedy, evil and driven by short-term profits. I know — because I used to share that view. But today I have more nuanced feelings. Over the years I’ve joined the boards of two environmental groups, the World Wildlife Fund and Conservation International, serving alongside many business executives.

As part of my board work, I have been asked to assess the environments in oil fields, and have had frank discussions with oil company employees at all levels. I’ve also worked with executives of mining, retail, logging and financial services companies. I’ve discovered that while some businesses are indeed as destructive as many suspect, others are among the world’s strongest positive forces for environmental sustainability.

The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government. ..."

http://www.nytimes.com/2009/12/06/opinion/06diamond.html

[pscot]

5. The idea that growth is a function of energy input

seems self evident. The notion that growth can occur with declining or static inputs is the extraordinary claim. As to whether available energy is likely to decline, opinions may vary. Maybe Hubbert was wrong.

[Statistical]

6. Producitivity increases? Efficiency increases?

The idea that growth requires an ever increasing amount of input energy is a premise of the "paper" and it is a false one.

The paper is based on a false assumption and then builds upon that.

[pscot]

7. Is global economic growth

over the last 50 years the result of productivity and efficiency gains? If energy inputs were to decrease by 10% over the next 10 years, would growth continue uninterrupted? How would that work?

[joshcryer]

9. Even the best case renewable scenarios save some 5 TW by 2030. But only 1 TW from now.

Even the best case scenarios will not have a flat energy curve past the 2050s, assuming everyone is allowed the same standard of living as those in the first world.

[kristopher]

10. How would you characterize the switch to EVs?

[pscot]

12. Since I have yet to see anyone driving an EV

I would say it's too early to tell. It does seem like our transport systems could be a lot more efficient, but we aren't the only player and transport isn't the only issue. And EV's are a modal shift, not a paradigm change. On the other hand, if we had begun the transition to EV's back in 1974 things would look a lot different today.

[kristopher]

13. Well, since you can't admit the obvious...

Have you ever heard the term "energy intensity"?

[joshcryer]

19. I'd rather admit the obvious, that capitalism has no desire to pay for the externalized costs of...

...fossil fuels. The OPs argument, while hardly coherent, is not wrong.

[NickB79]

25. And when you try to give 2 billion Chinese and Indians a standard of living closer to that of the US

Energy intensity does fuck-all if you have billions more people with already low energy intensities hoping to use just a little bit more energy each.

Just like how China has a much lower carbon intensity per person than the US, yet is now the #1 producer of CO2 globally.

[kristopher]

27. Energy intensity is the measure that disproves the OP's thesis.

[joshcryer]

29. Oh fuck "energy intensity" which is just another way to say "business as usual."

You don't seriously think China's "energy intensity" propaganda is going to do jack squat about emissions do you?

[kristopher]

32. "China's energy intensity propaganda"?

Lay off the drugs...

[joshcryer]

35. Oh, so you're suggesting that China's Cop15 arrangement will avoid catastrophic climate change?

I'll be sure to let your children and grandchildren know that your type was the reason they're living in a very different world than we did.

[kristopher]

33. You might want to ensure you have the right picture in your mind...

US energy intensity (2006) 8841Btu/$1GDP

China energy intensity (2006) 13285Btu/$1GDP

What is energy intensity?: http://www.un.org/esa/sustdev/natlinfo/indicators/isdms2001/isd-ms2001economicB.htm

[joshcryer]

18. EVs could bring our energy utilization down, however, with an increased standard of living...

...in the third world, it would be a wash. Really. Jacobson's Sustainable Path uses 1TW less energy than now, and he's planning at the cutting edge of technological innovation. Past the 2030s it will be more than now, assuming his plan is inacted immediately.

[joshcryer]

17. Even if the switch to EVs occurred at a rapid pace, the planet is still on a path of increased...

...energy production. Population and standard of living must level off otherwise energy production must go up. There are biological and technological limitations that we must face. Efficiency and productivity are not infinite.

[joshcryer]

8. Energy and productivity efficiencies can flatline energy use in a growing system...

...however, that assumes a completely monolithic environment, where efficiency and productivity increase as adoption occurs. This is a fantasy, utopian, environment. You look at things like mere batteries and it becomes apparent that there are limitations that we are hitting with our technological level.

Now I'm all for having this sort of environment, where growth has no negative impact on the environment, and where energy utilization goes down, however, we do not exist in that environment, and short of singularity, it ain't a political reality and does not reflect current production.

There's nothing incorrect in the thermodynamic statement as it relates to the current capitalist reality, as profit trumps technology above all.

[Terry in Austin]

15. Growth implies increase of some kind

The idea that growth requires an ever increasing amount of input energy is a premise of the "paper" and it is a false one.

What is it that's increasing when we talk about growth? If it's anything material that's growing, then something has to power it. No free lunch, no perpetual motion.

I think claiming this assumption to be false is extraordinary, and would certainly benefit by at least some support from you.

What do you offer as a true counter-assumption?

(edited for quote)

[joshcryer]

20. There are a crapload of efficiency gains to be made of course.

And that's where most people are disagreeing. They just don't see that those gains are going to be offset by the rest of the world adopting, yaknow, clean drinking water and other things we simply take for granted.

[pscot]

21. I think that's the point I was making above

I would add another qualification The bigger you get, the higher your maintianence costs. Our well being depends not just on growth, but on keeping our infrastructure in good working order. A lot of the "growth" of the last 50 years has come at the expense of the systems that sustain us. By that I don't just mean our sewers and roads, our power grid and rail lines, but our water and topsoil and oceans. We've been running a huge energy deficit in those areas, and it's been kept off the books. Now the bill is due and we don't want to think about it or hear about it. But the despite what voices in our heads are telling us, we're going to pay up, one way or another.

[FBaggins]

23. Hubert didn't talk about total energy.

He was talking about the peak in oil and some other fuels. His estimate of a peak in ENERGY was over a century
in the future.

[BeFree]

11. Grow or Die

The capitalist philosophy has been Grow or Die. Well, it's stopped growing.

The new philosophy must be a stable state philosophy which can endure reduced consumption of available resources and reinvent new inputs along with refined uses which do not depend on growth to survive.

But the hour is getting late and time waits on no one.

[bananas]

14. Interesting comment by WebHubbleTelescope

http://www.theoildrum.com/node/6181/586516